Expectations for Lubbock going wet not coming to reality

LUBBOCK — Until 2009, when residents voted to allow alcohol sales beyond the “Strip” on U.S. 87 south of town, this was the largest “dry” city in the U.S.

Supporters said one reason for going “wet” was a boost for the economy. But that has not happened ­— or at least, not as expected.

Ray Perryman, a well-known Texas economist, was hired to conduct a study before the vote and estimated local governments would gain $5.2 million in additional tax revenue each year if Lubbock went wet.

The election was expected to be close on two measures: One, expanding packaged alcohol sales in the county, and two, allowing mixed-drink sales in restaurants.

Both passed easily and the Strip’s monopoly on booze sales since 1935 was over.

The main reason voters said yes was the convenience of purchasing alcohol closer to their homes. But the economic impact has not been as predicted.

While certain areas of the alcoholic beverage industry, like the restaurant business, have seen improvements, Lubbock going wet has actually hurt some segments of the industry, said some retailers.

The one area that’s seen increased revenue is property taxes collected by the city, according to Eddie McBride, Lubbock Chamber of Commerce executive director.

“The city was already receiving sales tax revenue from businesses located at the strip,” McBride said, referring to 2006, when city officials voted to annex the Strip as a means of increasing sales tax revenue. That vote allowed for alcohol sales in the city but it did not allow them throughout the rest of Lubbock.

“The main benefit to Lubbock going wet has been ease of access for purchasing for local residents,” McBride said, “but there has not been a significant increase in sales tax revenue.”

Property tax revenue has increased because of the number of retailers opening new locations around the city, said McBride.

These new locations are in addition to the original stores along the strip. Property tax revenue still is being collected on those buildings, even as most sit vacant, after merchants were forced to open locations across the city to compete.

Another benefit to Lubbock going wet is attracting new business, according to Melissa Pierce, who was very involved in the 2009 campaign to pass Propositions 1 and 2.

“It has made the city more progressive and attracted new restaurants to Lubbock,” said Pierce.

On the flip side, the expanded alcohol sales footprint has hurt distributors.

Without a significant increase in alcohol sales volume, Lubbock going wet has created a lot of additional overhead for the distributors.

“It has actually hurt the bar business,” said James Stone, manager for Doc’s warehouse and distributing. “When people can go buy a six-pack and go home, there aren’t near as many stopping into the bars after work.”

Between expanding delivery routes and the need for additional employees, vehicles and fuel to cover those deliveries, and competition driving prices down, the profit margin for liquor distributors like Doc’s and local beer distributors is being squeezed.

Lubbock grocery stores like United Supermarkets were faced with the additional expense of expansions and remodels necessary to accommodate alcohol sales.

“Most of our Lubbock stores did not have space available for alcohol sales or storage,” said Eddie Owens with United. “There was a lot of expense involved, but we were prepared to make that move when necessary,” he said. “Most Uniteds are located in wet counties. There are very few in dry counties, so we were prepared for what we would need to do to accommodate those products.”

Initially, Owens said local United stores experienced a major increase in sales due to alcohol, but that has since leveled off. “There is not a huge impact now. Alcohol is really a very small percentage of our sales.”